Gov. Kathy Hochul of New York signed an executive order on Tuesday placing a one-year pause on the construction of the largest data centers, putting the state at the forefront of the national debate over artificial intelligence companies’ impact on American landscapes and energy grids.
The order, the first of its kind to be enacted in the United States, will temporarily bar the state from approving permits for so-called hyperscale data centers, which use 50 or more megawatts of power to operate. During the pause, New York will develop a regulatory framework for assessing how these behemoth projects affect the environment.
A farther-reaching moratorium passed the State Legislature last month, prompting questions about whether Ms. Hochul, who has championed artificial intelligence as a tool for research and good governance, would be supportive. Ms. Hochul has not yet signed the bill, but said she will continue to consider it.
On Tuesday, Ms. Hochul, a Democrat seeking re-election this year, reiterated her belief in the power of technological innovation to improve New Yorkers’ lives. “I also believe this,” she added: “that the businesses that build technology capable of changing civilization with A.I. are also capable of working with us to protect our power grid, to protect our water supplies and our communities.”
The order will take effect immediately. It is not expected to affect the data demands of back-office financial services, hospitals or universities.
The news was met with criticism from tech business groups and several construction unions that had expected to benefit from the building of data centers.
“A shortsighted moratorium only accomplishes one thing: It kills good-paying union jobs,” said Mark McManus, the president of the United Association, which represents plumbers and pipefitters. He added that the governor should instead institute “common-sense guardrails.”
But the move was celebrated by conservationists and by other Democratic politicians who hailed the governor’s mettle in standing up to Big Tech.
Laura Shindell, the New York State director at the nonprofit Food & Water Watch, called the moratorium “a huge step forward.”
“It comes as the direct result of immense public pressure from people across the state demanding their elected leaders protect them from Big Tech’s assault, which threatens the state’s clean air and water and New Yorkers’ financial security,” she said.
A recent Gallup poll showed that Republicans and Democrats alike oppose data center construction, citing the facilities’ rapacious demand for water and energy at a time when electricity costs are rising.
President Trump has sought to stymie the backlash against data centers, obtaining a pledge from tech companies that they will pay for the cost of their own energy, while encouraging development more broadly.
That approach has led to a Wild West atmosphere, with companies racing to build as many as 1,500 new data centers across the country, from former tobacco fields in Virginia to Native American land along the Columbia River in Washington.
The boom has sparked dozens of moratorium proposals at the state and federal level. In March, the Seminole Nation passed a complete moratorium, barring development on the tribe’s lands in Oklahoma. In Maine, the State Legislature passed the country’s first statewide moratorium, but it was vetoed by Gov. Janet Mills, a Democrat, in April.
Other Democratic governors, including Gretchen Whitmer of Michigan and Gavin Newsom of California, have also weighed in on the side of Big Tech, citing the economic opportunities the projects might bring to states still suffering from deindustrialization.
Initially it appeared that Ms. Hochul, a pro-business moderate from Buffalo, might fall into the same camp. She had previously said the matter ought to be left to localities, leading some to worry she might veto the moratorium passed by Democrats in Albany.
But the demands of the moment prompted Ms. Hochul to weigh in, she said in a statement: “As data center development threatens to hike up utility bills, deplete our natural resources and create uncertainty for New Yorkers, it’s my responsibility to take action and lead.”
Ms. Hochul’s order will require data centers to pay into a state fund to help with badly needed electrical grid improvements. She is also pushing for legislation that would strip data centers of their tax subsidies so as to mitigate their burden on taxpayers.
There has been considerable speculation about the tension between Ms. Hochul’s embrace of A.I. and the state’s goals to reduce emissions under its far-reaching 2019 climate law.
New York is not on track to meet those goals, though a legislative change to accounting methodology, backed by Ms. Hochul, will bring them closer. In the announcement of the executive order, officials said that during the pause on large-scale data center projects, the state would analyze the potential effects of those projects on water and air quality, as well as energy demand.
It is this latter concern that particularly haunts leaders ahead of the midterm elections, as gas prices and utility bills are skyrocketing. Earlier this year, Ms. Hochul took the first steps toward requiring data centers to either provide their own energy — by building on sites that already have power-generating equipment — or to pay a premium to buy from the grid. Those rules are expected to be in effect within the next year.
It is difficult to determine how many data centers exist because of the current lack of regulatory requirements. The Pew Research Center this year found 148 existing and six planned data centers in New York State. But State Senator Kristen Gonzalez, who sponsored the moratorium bill, has estimated there could be as many as 28 under consideration.
“Potential data centers in New York are seeking more than 9,000 megawatts of new electricity, about one-third of the total energy New York uses yearly,” Ms. Gonzalez said on Tuesday, calling the push an electricity “gold rush.”
When the moratorium is lifted, localities will be free to pursue their own agreements with companies, according to state officials. But the state will provide a framework for those negotiations to empower governments to push for concessions from the companies, like investments in local infrastructure and agreements that projects be built with union labor.
The moratorium will not delay projects that already have all the required permits, but will place a hold on those still requiring approval.
The broader bill that was passed by the Legislature would bar projects that use 20 megawatts or more, and would institute energy efficiency standards for projects larger than one megawatt, requiring them to use almost entirely renewable energy by 2050.
Hochul administration officials said that the governor had issued the order for the sake of expediency but that she would continue to review the legislation and any amendments with the bill’s sponsors.
Ms. Gonzalez, who represents parts of Manhattan, Queens and Brooklyn, thanked the governor on Tuesday.
“Support for a data center moratorium transcends demographics, political ideologies and geographies,” Ms. Gonzalez said, adding, “With this, we can continue to benefit from innovation while protecting ourselves from its risks.”
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